Gold bounces from $1720-21 lows

Gold is looking to push higher towards $1835 and $1865 levels in the next few weeks before finding resistance again. The yellow metal might have carved a meaningful higher low around $1721 on September 29 and has turned higher thereafter.

Gold has carved a classic Elliott Wave pattern at two different degrees since $1677 lows. The metal has produced a 5-3 pattern marked as (a) and (b) around $1834 and $1721 respectively. Furthermore it has carved wave I and ii around $1770 and $1745 levels.

It could be seen as a classic example of the fractal nature of markets. If the above is correct, the next move should be 5 waves, which is Wave (c) at a higher degree, and terminate above $1834 mark. Also, prices should stay above $1721, to keep the above structure intact.

Once the above (a)-(b)-(c) corrective zigzag structure is complete, Gold is expected to turn lower towards $1450 levels, to continue its potential diagonal structure at one larger degree. For now, immediate resistance is seen around $1786 mark and a push higher would bring bulls back in control.

Traders might be preparing to initiate fresh long positions around $1740-55 zone, with potential risk below $1721 and target above $1834 levels respectively.

Prepared by

The Profinacademy.com Team